Kamala Harris Takes on Housing in Latest Economic Plan

Harris reveals her economic agenda, focusing on boosting housing supply and limiting Wall Street’s growing influence.

Jordan B. & Han-Gwon Lung
August 19, 2024

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Good morning. On Friday, Kamala Harris unveiled her economic agenda. At the center of her speech was the housing market and a plan to boost supply and curb Wall Street’s increasing control. But will it work?

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Harris Takes on Housing in Latest Economic Plan

Vice President Kamala Harris made the housing market a central issue in her first major policy speech as the Democratic presidential nominee.

A bold plan: Harris unveiled her economic agenda on Friday, highlighting a plan to build 3 million new homes over four years, targeting the barriers that hinder new construction at state and local levels. It’s a YIMBY-friendly push to stabilize prices and improve affordability by increasing supply.

What they say: Housing policy experts agree that boosting housing supply is crucial to solving the market’s affordability issues. Jung Hyun Choi from the Urban Institute noted that the lack of supply is “the root cause of the current problem,” making Harris’s focus on construction a vital part of the solution.

Spurring development: Harris’s plan includes offering the first-ever federal tax incentive for builders of starter homes and creating a $40B fund to encourage local construction. Additionally, she proposes repurposing federal lands for affordable housing, expanding on ideas from previous administrations. Harris also proposes a $25k down-payment assistance program for new homeowners.

Rent hikes: Harris also called for legislation to prevent multifamily landlords from using algorithmic systems to raise rents. The proposed bill, introduced earlier this year, addresses concerns that property management software enables landlords to coordinate price hikes, effectively creating rental cartels.

Harris vs. Wall Street: In addition, Harris is backing the “Stop Predatory Investing Act,” which would remove tax benefits for large-scale investors in single-family rental homes. This aligns with previous legislative efforts, such as the “Stop Wall Street Landlords Act of 2022,” which aimed to impose taxes on institutional investors.

A bigger problem: However, housing experts like NAHB chairman Carl Harris worry that targeting institutional investors, especially after Biden’s rent cap proposal, could harm the single-family rental market. This could further discourage much-needed housing production

➥ THE TAKEAWAY

Why it matters: Despite lingering doubts about some aspects of Harris’ proposal, building more affordable homes is key to solving the housing crisis. While Wall Street’s role in rentals has pros and cons, experts agree that increasing supply is the real game-changer, giving young Americans a fair shot at homeownership and housing security where jobs are.

Do you support Kamala’s economic plan on housing?

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✍️ Editor’s Picks

Rate speculation: Mohamed El-Erian warns that market optimism surrounding potential Fed rate cuts may be overblown.
PE fundraising: 1,000+ real estate private equity firms raised $6.5B in H1 2024. Get the full list here. (sponsored)
Airport revival: A $22 billion plan aims to transform Toronto’s former Downsview Airport into a small city.
Safe haven: Gold reached a record $2,500 an ounce as increased demand was driven by expectations of imminent Fed rate cuts.
Steep decline: New U.S. home construction plunged in July to its slowest pace since the early pandemic.
Shedding debt: Medical Properties Trust sold 11 Colorado facilities to UCHealth for $86 million, continuing its strategy of reducing debt.
Condo crisis: Florida’s aging condo market is facing a “catastrophic” downturn as new inspection regulations drive a surge in listings and deter buyers.
Downsizing: Proptech firm VTS lays off 20% of its staff to focus resources on key growth areas.

🏘️ MULTIFAMILY

Teacher salaries: A Redfin study reveals that teachers can only afford 47.9% of rental apartments within a reasonable distance from their schools, a slight improvement from last year.
High-value acquisition: SCS Development Company has purchased Paragon at Old Town, a 163-unit multifamily property in Monrovia, California, for $87.25 million.
Hot market: Irvine, CA, has become the hottest residential market in the U.S., with home prices soaring 21% amid strong population growth and housing development.
Boomtown: Cypress Equity Investments plans a $30 million, 700-unit apartment complex in rapidly growing Celina, Texas.
Housing agenda: Kamala Harris pledges to build 3 million homes and crack down on rental algorithms if elected president.

🏭 Industrial

Data deal: JK Land Holdings has acquired a 25.29-acre site in Loudoun County, Virginia, for $60 million.
Hefty bets: Prologis acquires Verizon subsidiary TracFone’s headquarters near Doral for $54.5 million, planning to redevelop the site into modern logistics spaces.
Steady space: The State of Florida purchased a 423,000-square-foot warehouse in Auburndale for emergency supply storage from Dalfen Industrial.

🏬 RETAIL

Bargain shoppers: As inflation drives up costs, consumers are increasingly turning to dollar stores, resulting in a notable rise in foot traffic and repeat visits.
Grocery-anchored: Longpoint Realty Partners acquires Palm Aire Marketplace in Pompano Beach for $33.1 million, expanding its South Florida retail holdings.
Extension: 1HWY1, the developer behind the 2.7 MSF Seaport mixed-use project in San Diego, now has until October 2027 to secure necessary approvals and raise capital
Luxury expansion: Hermès is set to open its first Tennessee store in Nashville’s Wedgewood Village, enhancing AJ Capital’s artsy district development.

🏢 OFFICE

Market bottom? Moody’s Analytics reports signs of stabilization in the US office market, with seven recent sales over $100M below previous values, offering key price clarity as volumes steady.
Strong tenant demand: Finmarc Management has purchased a 500,000-square-foot Class A office portfolio in Centreville, Virginia, for $39.36 million.
Rising rates: The CMBS special servicing rate climbed to 8.30% in July 2024, driven primarily by distress in the office sector, which now stands at 11.25%.

🏨 HOSPITALITY

Seeking alpha: As department stores struggle, Saks Fifth Avenue’s parent company, HBC, is shifting focus to luxury real estate, capitalizing on its $7B property portfolio.